California Billionaire Tax: GOP Bill Aims to Block State Tax on Ex-Residents

WASHINGTON — The battle lines are being drawn in California over a proposed tax on the state’s wealthiest residents, with a Republican congressman now attempting to preempt the measure with federal legislation. Representative Kevin Kiley (R-Rocklin) plans to introduce the “Keep Jobs in California Act of 2026” on Friday, a bill designed to prevent states from retroactively taxing individuals who no longer reside within their borders.

The move comes as progressives push to place a “billionaires tax” on the November ballot, a proposal championed by Senator Bernie Sanders (I-Vt.) and fiercely debated among California Democrats. Sanders held a rally in Los Angeles on Wednesday, February 18th, to galvanize support for the tax, which aims to generate revenue to offset cuts to federal healthcare funding.

Kiley’s legislation is a direct response to concerns that California’s proposed tax could incentivize wealthy individuals to leave the state, and then be pursued for taxes on assets held before their departure. Reports have surfaced indicating that prominent billionaires, including Meta CEO Mark Zuckerberg and Google co-founders Larry Page and Sergey Brin, are considering relocating in anticipation of the tax’s potential enactment.

“California’s proposed wealth tax is an unprecedented attempt to chase down people who have already left as a result of the state’s poor policies,” Kiley stated in a statement released Wednesday. “Many of our state’s leading job creators are leaving preemptively.” He further characterized the tax as “fundamentally unfair” and a form of “confiscation of assets,” pointing to California’s already high tax burden.

The proposed Billionaire Tax Act, backed by the Service Employees International Union-United Healthcare Workers West, would impose a one-time 5% tax on the net worth of California’s 200-plus billionaires. Proponents argue it’s a necessary step to secure funding for vital healthcare programs, particularly in the face of federal cuts.

Sanders framed the issue as a matter of priorities, stating, “It should be common sense that the billionaires pay just slightly more so that entire communities can preserve access to life-saving medical care.” He argued that access to healthcare and emergency services should take precedence over tax breaks for the ultra-wealthy.

However, the proposal has met with resistance even within the Democratic party. Governor Gavin Newsom has voiced opposition, warning that a state-by-state approach to taxing the wealthy could stifle innovation and entrepreneurship. Newsom, who is reportedly considering a presidential run in 2028, appears wary of policies that could be perceived as hostile to business.

The financial opposition to the tax is also mounting. Sergey Brin, co-founder of Google, has donated $20 million to a California political drive aimed at defeating the measure, according to a disclosure reviewed by the New York Times. Peter Thiel, co-founder of PayPal and chairman of Palantir, has also contributed millions to the effort.

Kiley’s own political future is also uncertain. His 5th Congressional District has been significantly altered by California’s voter-approved Proposition 50, leaving him to navigate a reshaped political landscape as he seeks reelection. The introduction of the “Keep Jobs in California Act” could be seen as a strategic move to appeal to voters concerned about economic stability and the potential for capital flight.

Kiley expressed concern that the wealth tax could trigger a broader economic collapse in the state, arguing that California’s tax structure is “incredibly volatile” and heavily reliant on the income of its wealthiest residents. He claimed that the top 1% of earners account for 50% of the state’s tax revenue, making the economy particularly vulnerable to shifts in wealth.

The debate over the billionaire tax highlights the growing tension between progressive policies aimed at wealth redistribution and concerns about maintaining a favorable business climate. The outcome of the November ballot measure, and the fate of Kiley’s federal legislation, will likely have significant implications for California’s economy and its role as a hub for innovation and entrepreneurship.